Okta CEO Todd McKinnon
Okta
Okta, whose cloud software allows office workers to access all of their applications through a secure online service, said Wednesday it was spending $ 6.5 billion to acquire rival Auth0.
Okta shares fell about 13% in extended trading after the announcement. The share agreement equals about 21% of Okta’s market cap since Wednesday’s close. Okta said he expects the transaction to be completed by the end of July.
With several large companies relying on cloud-based applications, Okta recorded its IPO revenue growth in 2017. The company said in its earnings statement on Wednesday that fourth-quarter revenue rose 40% to 234.7 millions of dollars, exceeding analysts’ estimates, according to Refinitiv. Its net loss extended to $ 75.8 million from $ 50.4 million a year earlier.
Auth0 last raised private equity in July at a valuation of $ 1.92 billion. Salesforce Ventures led the round, more than tripling its money in eight months.
Okta co-founder and CEO Todd McKinnon was previously vice president of Salesforce, working under Marc Benioff for more than five years. McKinnon is now taking a page from Benioff’s playing card, paying for the purchases, but still focusing on internal growth.
Salesforce was the largest software buyer in recent years, agreeing in December to buy Slack for $ 27.7 billion. Prior to that, Salesforce bought Tableau for $ 15.3 billion in 2019 and MuleSoft for $ 6.5 billion a year earlier.
McKinnon wrote in a blog post that Auth0 will continue to operate independently. He said Auth0 CEO Eugenio Pace for years called him “an enthusiastic ally in establishing identity as the primary cloud.”
“Both Eugenio and I have dedicated our careers to identity, because we know that selecting an identity platform is one of the most critical technological investments an organization can make.” McKinnon wrote.
CLOCK: Salesforce’s $ 27.7 billion deal for Slack